Global Macro Outlook: It was the best of times, Is it the worst of times?

Published on
October 26th, 2016
59 minutes

Global Macro Outlook: It was the best of times, Is it the worst of times?

Presentations ·
Featuring Jawad Mian

Published on: October 26th, 2016 • Duration: 59 minutes

Jawad Mian, Founder of Stray Reflections, an independent global macro research and trading advisory, provides a bullish outlook on today's markets as a counterpoint to the doom-and-gloom equity bears.


  • JS
    John S.
    12 February 2017 @ 01:39
    With so much (everything) dependent on continued low rates and inflation plus robust fiscal policy...why do I get the feeling this is akin to walking a razors edge while praying for complete & total tranquility? Certainly possible but I think the probability of such an outcome is a reach at best.
  • MP
    Michael P.
    17 January 2017 @ 13:58
    Excellent view. This one is bullish and presented with very thoughtful backing.
  • RS
    Ross S.
    6 November 2016 @ 16:56
    Thomson Reuters* not Thompson :)
  • TW
    Tom W.
    2 November 2016 @ 01:55
    Very interesting - thanks for sharing these thoughts.
  • GE
    GABI E.
    1 November 2016 @ 08:11
    Thank you for your presention!! it was very useful. try to do it more often for RV.
  • NH
    Neil H.
    1 November 2016 @ 00:39
    He has a wealth of knowledge but a lot can change in 12 months. Unlike many I am skeptical the fed will allow the dollar to strengthen dramatically
  • JT
    Jayne T.
    31 October 2016 @ 19:19
    What causes the last up-leg in the bond to end could likely be inflation. And, if inflation rears its ugly head, then all bets are off for greater fiscal spending, thus ending any bull market in stocks. Right now the "smart money" assumes a continuation of a low-inflationary environment. Caveat emptor.
  • TE
    Tim E.
    30 October 2016 @ 03:25
    Thank you for providing a voice of reason. The world is not going to end. Maybe there's still legs in this bull, as you suggest. Betting against it has been spectacularly wrong for years now.
  • GO
    Gary O.
    29 October 2016 @ 17:53
    Thank you for your insight.
  • JL
    Jacob L.
    29 October 2016 @ 07:36
    So his near-term(!) bullish case rests on the fact that interest payments on the huge debts are low without using the word - CURRENTLY... At the same time he sees encouraging signs from rising inflation. He does not deal with the big question that should arise from those two conclusions: Will we be able to balance and contain inflation because otherwise it is goodbye to low interest rates and therefore defaults all over the place. I feel this presentation was short term hit-n-runish and not really a case for bulls.
  • EK
    Emil K.
    28 October 2016 @ 18:55
    Excellent. Very much enjoyed it. Have been asking people lately, "where is the good news" and it has been difficult to get an answer. So this will be useful to have. Agree with David S. below, it appears to be a matter of timing. Many are worried about today. Jawad is saying don't worry... for now... (but what about after 2018?). Something is wrong but it can remain wrong for several more years (assuming nothing randomly breaks).
  • JF
    John F.
    27 October 2016 @ 21:01
    I liked the presentation. However, Market corrections do not require a recession. For the educated: compare the %NYSE > MA to the Rydex calls on either NASDAQ or SP500. You will see they move oppositely at this time. This indicates a decline in the Market over the next 5-6 months (with the first bounce on Nov 17 (time) or when RYTPX breaks above $24 (target) and when %NYSE >MA dips below 60% and approaches 30%. For the uneducated: 1.) The Market always goes down after the election (Mom says). 2.) How goes GE, so goes the Market.
  • DS
    David S.
    27 October 2016 @ 16:06
    It is always a pleasure to listen and reflect on Mr. Mian's market assessments and predictions. I will watch again, but it appears that Mr. Mian believes that we are in the final stage of a bull market that will still show upside gains for a couple of years. It also appears that many of the viewers commenting believe that we are already in the final stage and the market will plunge momentarily, if not sooner. The real difference, therefore, is timing - When will the bear market end? No one knows, place you bets and see what happens.
  • RM
    Robert M.
    27 October 2016 @ 15:39
    The process of Xi and the Politburo consolidating and increasing power is not a political tailwind because he is actually delaying re-balancing. He is causing a slower growth path for China. Profits are not dependent on a recession, they lead GDP. Higher wages here will immediately cause more layoffs and a continuing reversal in non farm payrolls growth which has topped for the cycle.
  • KO
    Kieran O.
    27 October 2016 @ 13:12
    I love Jawad's contrary opinions. He has a unique perspective that has to be taken into account. I am a firm believer in the impossibility of prediction and use views such as Jawad's to balance my internal thoughts. Thanks for bringing this incredibly important intellectual counter balance back on real vision.
  • PU
    Peter U.
    27 October 2016 @ 10:21
    In his prior presentation, he specifically said, that if the Fed does not raise rates in June of 2016, then he would turn bearish. Why doesn't he comment on his prior predictions on higher US rates (due to stronger growth in the US . . NOT)? Where is the discipline in his thought process? If the forecast doesn't materialize, change the goal post or metric and remain bullish . . . He is way to optimistic on Western government's ability to get fiscal stimulus packages across WITHOUT a catalyst like a recession. I like this guy because he can really present story for the bull scenario, but is he sniffing too much smelling salts?!!
  • JM
    Jason M.
    27 October 2016 @ 09:58
    Thanks Jawad, I'd recommend reviewing the prices sector debt ratio a bit more. A sting consideration for the large amount of foreclosures account for nearly 50% of the debt reduction in the US post FC. Mtgs were simply replaced with Rents... the picture is nowhere close to what you are counting on. Also review real tax receipts in the US, -you'll come to find that like GDP they have peaked and are rolling over (those who pre FC made $100k are now making $70k) either that or we've created a whole bunch of Donald Trunps who have figured out the tax code loopholes...(doubt it) good job presenting your side I liked your process/approach though I don't ageee with most of it.
  • FG
    Fred G.
    27 October 2016 @ 08:38
    Japans total tax revenue is 57,604 and its interest expense/bond retirements for 2016 is 23,612 so 41% of all government revenue goes towards servicing/retiring debt. This does not on the face of it appear to be sustainable with a declining working age population so not sure how it can be considered that they actually have a favourable debt situation. If they can eternally issue debt at negative rates and people are willing to buy it I suppose the "game" can go on for a long time... (all figures in 100m yen)
  • GH
    Gregory H.
    27 October 2016 @ 04:57
    Liked the video... I don't really like how he framed the Central Bank Permanent Monetization of Bonds and/or potentially other assets down the line (a la the BOJ currently buying REITs and Equity ETFs)... If I am a Major Central Bank, whenever I buy a Positive Yielding Bond (or REIT or Asset), and give the other party Cash in return, I am taking an income stream out of private investor hands and replacing it with a zero-coupon perpetual (Cash). This should be quite deflationary in the long-run. How can this help growth long-term? Additionally, even if you eliminated all debt in the world (which would always mean removing tons of income streams on the other side of the ledger), sustainable growth can only occur if the majority of people in the economy (the proverbial middle class) sees continual real income growth.
  • NY
    Nicolas Y.
    27 October 2016 @ 04:19
    Great to hear a refreshing thesis, backed by strong facts. I am still bearish, at least regarding equities (don't know about Treasuries yet) and lower-rated corporate debt. One reason is: interest payment might become more bearable, yet principal risk remains. Another risk is the derivatives market and the fragility in the banking sector. This debt therefore still has large risk of "blowing up". Agree with his view on fiscal expansion and global political environment, but cannot agree with his view on demographics and job growth: there is a growing labor force, but I doubt economic stimulus will be applied skillfully enough by policymakers. Also, with technological innovation accelerating, more and more traditional and accessible jobs will be removed. Therefore, how can we pretend to strive for job creation/growth, while all our innovation efforts are meant to increase automation and reduce the amount of humans required to operate a business? Great interview, will have to rewatch!
  • TS
    Tim S.
    27 October 2016 @ 03:51
    Thanks Jawad, you make very cogent arguments. If we all shared the same outlook and were all correct it would not provide the risk/reward tradeoff. Thank you for allowing me to re-examine my own thinking! I'm not sure I see extended QE as beneficial but we will see in the coming months and years.
  • JM
    John M.
    27 October 2016 @ 02:56
    If one looks at the details of Canada's projected deficit spending I doubt most would conclude that it offers insight/new path for other economies.
  • JS
    Jon S.
    27 October 2016 @ 02:14
    In general when someone creates a thesis and works like the devil to 'find' evidence of their thesis, I tend to grow skeptical. What I like to know is Jawad's economic prognostications at two inflection points.....December of 2007 and March of 2009. If he called those turns then respect. If not, then this presentation is just hot air. I'm agnostic to his track record. #Trackrecordsmatter.
  • PS
    Patrick S.
    26 October 2016 @ 23:26
    Jawad lays out a very clear view of how he sees the economy, markets and central banks moving. He has been a bull during the last year; a lone wolf. His stubborn view of the behavior of the markets has borne fruit. With all the nervousness out there, he may be completely correct.The truck we are looking for will never run us over. Perhaps his view of fiscal spending can be reinterpreted. If governments all follow the Canadian lead and spend freely to stimulate the economy, profitability will return and GDP will rise, but, so will inflation. Perhaps the truck he does not see is the possible explosion in inflation. Time will tell. Great educational viewpoint! I look forward to more updates.
  • DH
    Dale H.
    26 October 2016 @ 22:54
    This was one of the best commentaries I have seen in terms of the summaries of sections, logical flow of argument and overall summary and recommendations. (Love Grant's also). As far as content... back later, I have an ice pack on my head. Thinking about Oliver (MSA), writing/speaking lately on commodities, softs bottoming show turn in... also, what effect of fiscal spending, and China, AIIB/Silk Road on some commodities? Need time to rewatch and digest this. Great to see a different view an some key points.
  • DR
    De R.
    26 October 2016 @ 19:21
    Jawad work on China is poorly done he have missed out many crucial points in his analysis.
  • VS
    Victor S. | Contributor
    26 October 2016 @ 19:19
    I 'm sure he can be a great teacher at Columbia U! I disagree with 100% of his very limited analysis eg Since he brings up debt as good " adjusted" for interest and fed holdings why not bring up off balance sheet debt, cash accounting and unfunded liabilities . Very biased to his view. I wish him luck.
  • NR
    Nuno R.
    26 October 2016 @ 19:05
    He articulates very well the Bull case, thanks for this interview. Regards from another Bull.
  • DR
    De R.
    26 October 2016 @ 18:53
    Last that I know growth reflation efforts by CBs & govs have failed consistently, min. wage hike & taxing the rich doesn't work, hows that going to boost "growth"???
  • JM
    Justin M.
    26 October 2016 @ 18:44
    Very interesting presentation. I find myself disagreeing with several points ie: the sustainability of the debt and the assumption that CB's have outright control of the long end of the curve and thus control over interest expense. However, I cant deny that Jawad made some very convincing points and he clearly researched his points. This is what makes RVTV special. Makes me rethink my positions.
  • AA
    Aymman A.
    26 October 2016 @ 18:29
    Great presentation. I am not bullish on equities but I want to think, am i being dogmatic? Is he right? US bond rates are rising BUT the Eurodollar is not getting steeper (unlike past episodes of ri
  • DB
    Don B.
    26 October 2016 @ 18:08
    It would seem to me that a huge expansion in government spending would result in huge issuance of government bonds which would seem to contradict the notion of a blow off move higher in price.
  • HJ
    Harry J.
    26 October 2016 @ 16:53
    Nice presentation even if he is in stark contrast to an average view of most of your shows. I'm. Not buying his view!
  • RI
    R I.
    26 October 2016 @ 16:03
    Why is the transcript not available for this one?
  • RM
    Richard M.
    26 October 2016 @ 15:38
    Great discussion! I like the non-consensus view (even non-consensus for RVTV view!), and while I don't agree with all his points it's good to open my eyes to other possibilities of event occurrences! Thanks for the refreshingly different perspective!
  • HA
    Hamed A.
    26 October 2016 @ 15:36
    Well presented, always welcome a well thought out thesis, even if i completely disagree. A bit of a circular argument on CB interest payments and debt. If money printing worked, ancient rome wouldnt have collapsed, German would have won the war, Zimbabwe would be a super power
  • GW
    Grant W. | Founder
    26 October 2016 @ 15:30
    Another great presentation by one of my favorite bulls! I may disagree with a lot of Jawad's conclusions but his intelligence and the thoughtful way he always presents his arguments make me question my own assumptions every time I listen to him or read the brilliant Stray Reflections. This is precisely what we want to do at Real Vision - present both sides of an argument and create an environment where the discussion can be had in an intelligent, respectful way. Bravo Jawad! Thanks Buddy.
  • tW
    tgwtom W.
    26 October 2016 @ 14:32
    Thank you Jawad.
  • TS
    Tyler S.
    26 October 2016 @ 14:02
    Well done
  • VK
    Viresh K.
    26 October 2016 @ 12:48
    Great contrarian view. Agree that Governments can further expand Fiscal policy. This in my opinion is where things will start going wrong (just as no one expects it) as growth does not match market expectations and the initial boost from Fiscal policy expires.
  • PB
    Pieter B.
    26 October 2016 @ 11:59
    Thanks a lot for your time! I like your voice & style, yet I do have a different opinion I guess...time will show:)
  • Nv
    Nick v.
    26 October 2016 @ 11:42
    so you are looking for growth upside surprises and yet bullish bonds? I liked the talk but the different arguments do not hang together. Read Bridgewater research that shows bonds (prices) and equities both fall when inflation becomes volatile